Case Interview Question #00263: Your university’s campus food service (think University of Chicago’s Hutchinson Commons food court as an example) is losing money. What might be the problem?
This is a classic profitability case question, so the first hunch is to go with the “Profit = Revenue – Cost” framework. This case question doesn’t make clear whether they’ve always lost money, or whether it just recently became unprofitable, so first try to clarify this.
If they only recently started losing money, then find out what happened during the time when profits started declining. Was there any change to food quality, service hour, food prices, etc? Did a new competitor pop up? Did a food service worker’s strike just happen? If they’ve always been losing money (as it is the case here), then go into the standard revenue and cost analysis.